EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0840467
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Ballantyne Foods Pty Ltd applied for a TCO in respect of certain butter plactising machine on 19 November 2008.
Instrument
TCO No 0840467 was made on 30 January 2009. It declares that those certain butter plactising machine are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0840467 is taken to have come into force on 19 November 2008.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Tariff Concession Instrument No. 0840467 was introduced in 2009 under the Customs Act 1901, designed to address the need for tariff concessions on certain imported goods. This legislation facilitates the application of a lower rate of customs duty on specified goods by allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) when certain criteria are met. The primary objective of this instrument, as stated in the explanatory statement, is to provide relief to importers by granting tariff concessions on particular goods, thereby ensuring that the rights of these importers are beneficially affected without imposing any new liabilities. The enactment of this instrument by the CEO followed a successful application by Ballantyne Foods Pty Ltd for a concession on certain butter plactising machines, leading to the reduction of duty rates for these specific goods from 5% to free. This change in duty rates took effect from the date the application was lodged, 19 November 2008, with no adverse effect on the rights of any person other than the Commonwealth.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the application for Tariff Concession Orders (TCO) by any individual or entity seeking a lower rate of customs duty on certain goods. Specifically, section 269F of the Act allows for an application to the Chief Executive Officer of Customs (the CEO) to be made in respect of goods, provided they are not those specified in section 269SJ that are ineligible for TCOs. The CEO must assess whether the application meets the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business as defined under sections 269C, 269D, and 269E. If satisfied, the CEO must issue a written TCO, as per section 269P(3). The TCO applies nationwide across the Commonwealth of Australia and affects the rights of importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO, without imposing any new liabilities on any person other than the Commonwealth. The instrument in question, TCO No. 0840467, pertains to a butter plactising machine and came into force on 19 November 2008, with no submissions received in opposition to its registration.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269F, and 269P of the Customs Act 1901. Section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of certain goods. If the application is not in respect of goods specified in section 269SJ, which are ineligible for a TCO, the CEO must determine whether the application meets the core criteria outlined in section 269C. If satisfied that the criteria are met, the CEO must issue a written TCO under section 269P(3), specifying the rate of duty applicable to the goods. In this case, TCO No 0840467 was issued for certain butter plactising machines, setting their duty rate at free instead of the general rate of 5%.
The Act imposes several obligations on the parties involved. The applicant must ensure that the goods in question are not specified in section 269SJ and must provide sufficient information to allow the CEO to assess whether the core criteria are met. The CEO is required to publish a notice in the Gazette inviting submissions from any interested parties if they consider the TCO should not proceed. The CEO must also make a decision on the application based on the evidence provided and the criteria set out in section 269C. In this instance, the CEO did not receive any submissions opposing the TCO.
The legislation also outlines the consequences for non-compliance with the provisions of the Customs Act 1901 and the Tariff Concession Instrument No. 0840467. While the explanatory statement does not explicitly detail specific offences, penalties, or consequences, breaches of the Customs Act 1901 generally attract civil and criminal penalties. Under section 269 of the Act, the CEO has the authority to impose penalties for non-compliance with customs laws, which could include fines and imprisonment for serious offences. Additionally, failure to comply with the terms of a TCO could result in financial penalties or legal action against the party found in breach.
The commencement date of the TCO, as specified in subsection 269S(1) of the Act, is the date on which the application for the TCO was lodged. For TCO No 0840467, this date is 19 November 2008. This date is significant as it determines when the tariff concession becomes effective, allowing importers to benefit from the reduced duty rate. The TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, nor does it impose any liabilities on any person for actions taken prior to the registration date.